LL doesn't want a 'deposit' what are my rights

[carti946]

Hi everyone,

 

I have a somewhat confusing situation. We have agreed vocally to rent a house, and the landlord says that they don't want a deposit because they would then be obliged to place it into a deposit scheme (don't ask, see below). Instead they have requested that we pay our rent two months in advanced.

 

Let's just say that this is the case (conceptually, I am having problems with this), if we then have a dispute about supposed damage, how do they pursue us for their claims?

 

It's confusing to me because after 14 years of renting, I have never been in a house without a deposit, it seems to me, with the protection scheme in place, that deposits are the best form of protection for both parties. The LL claims that they don't want to pay any more fees after having to pay for house and tenancy insurances (they were unaware of the DPS), and that the interest earned on the deposits is immoral.

 

I am worried that I am leaving myself vulnerable here, and that they might see the 'second month of rent' as a de facto deposit, then demand that we haven't paid up at the end of tenancy.

 

Any help is greatly appreciated.

 

carti946

Edited May 28, 2010 by carti946
grammar

[Aequitas]

There is a rule of thumb that says that anyone too clever for his own good who tries to get round statutory protection will fail. If a landlord does not set it up properly, taking what amounts to two months rent when the rent is payable monthly may amount to a deposit.

 

For a six month tenancy starting on 1st January where the rent is payable monthly you need to set it up something like this:

 

Payable on 1st January, rent for January and February

 

Payable on 1st February, rent for March

 

Payable on 1st March, rent for April

 

Payable on 1st April, rent for May

 

Payable on 1st May, rent for June

 

No rent will be payable on first June

 

If set up this way it can be seen that the rent payable over the period of six months is equal to six months' rent and there is therefore nothing that could be regarded as a deposit. However, if it were set up so that the amount payable over the fixed term exceeds the rent for the term, then there has to be an element of deposit.

 

If it is all set up correctly, there should be no problem.

[carti946]

Thank you for the quick reply. I believe that is how the rent will be paid.

 

What then would happen in the case of a dispute? Would it be straight to the courts and small claims?

 

carti946

[Kentish Lass]

For the court not to see this as a deposit, the two month's rent in advance should be just that, i.e. rent for January and February and next payment not due till beginning of March. Landlord won't like this.... Of course, if there is no deposit then LL has nothing to deduct any damages from.

 

I would not want to rent from a landlord like this - what else is he trying to fiddle. The deposit protection scheme with all its flaws was brought in to protect you, the tenant.